Aug. 19 at 8:10 PM
U.S. homebuilder stocks rallied Wednesday after the Treasury Department announced it would double the size of its long-term bond buyback operations to improve market liquidity. The move pushed long-term Treasury yields lower, with the 30-year yield falling to 5.203% after approaching its highest level since 2007, while the 10-year yield eased to 4.660% from its 2025 peak.
The decline in borrowing costs boosted housing stocks, with the S&P 1500 Homebuilding Index rising 4.4% and the PHLX Housing Index gaining about 3.2%. D.R. Horton, Lennar, PulteGroup, Builders FirstSource and Toll Brothers all reacted positively to the announcement. Lower long-term yields could ease mortgage-rate pressure and improve housing affordability, potentially supporting demand for new homes.
The move followed a sharp rise in global bond yields on Tuesday, when yields reached multi-decade highs as hopes for a Middle East peace deal faded and inflation concerns intensified.
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